Asian markets fluctuated Tuesday as investors assessed the latest tech rally on Wall Street amid worries a bubble is forming in the sector, while mixed signals from Federal Reserve officials fed uncertainty over its next interest rate move.<\/p>\n\n\n\n
A flood of multi-billion-dollar investment into artificial intelligence has been a key driver of the surge in mostly technology equities across the globe this year, sending valuations to record highs.<\/p>\n\n\n\n
The rally has been helped by easing trade tensions since US President Donald Trump\u2019s April tariff bombshell and expectations that the Fed will continue lowering borrowing costs<\/p>\n\n\n\n
There is also a fear of missing out, in turn pushing prices up further, but there is increasing talk that the gains may have gone too far \u2014 with most of the gains coming from the tech sector \u2014 and a painful correction could be on the way.<\/p>\n\n\n\n
ChatGPT-maker OpenAI signed a $38 billion deal with Amazon\u2019s AWS cloud computing arm, marking its latest huge tie-up following agreements with Oracle, Broadcom, AMD and chip titan Nvidia.<\/p>\n\n\n\n
\u201cEven after the tariff-induced swoon in April, global equities have tacked on $17 trillion in market value, with the rally increasingly bottlenecked into the same handful of tech titans,\u201d wrote SPI Asset Management\u2019s Stephen Innes.<\/p>\n\n\n\n
\u201cIt\u2019s as if the entire market has narrowed to a single crowded corridor, the walls lined with AI logos and venture dreams.<\/p>\n\n\n\n
\u201cAmazon\u2019s move simply adds another rocket to the booster stack \u2014 and traders are cheering the ignition, not asking how much fuel remains.\u201d<\/p>\n\n\n\n
Wall Street ended on a mixed note, with the tech-rich Nasdaq rising along with the S&P 500 but the Dow in the red.<\/p>\n\n\n\n
Asia struggled to extend Monday\u2019s advances.<\/p>\n\n\n\n
Hong Kong rose with Wellington, Manila and Jakarta but Tokyo, Sydney, Singapore, Seoul and Taipei edged down with Shanghai flat.<\/p>\n\n\n\n
Remarks from Fed officials did little to provide support for further buying after boss Jerome Powell indicated last week that a third rate cut this year \u2014 after one in each of the past two meetings \u2014 was not definite.<\/p>\n\n\n\n
Governor Lisa Cook said she saw inflation remaining elevated in the coming year as tariffs bite, pointing out that some businesses had indicated they were running down inventories before passing on costs to consumers.<\/p>\n\n\n\n
\u201cLooking ahead, policy is not on a predetermined path,\u201d Cook said. \u201cWe are at a moment when risks to both sides of the dual mandate are elevated,\u201d she added, referring to the bank\u2019s target to support jobs while keeping rates at a level to put a cap on inflation.<\/p>\n\n\n\n
\u201cEvery meeting, including December\u2019s, is a live meeting.\u201d<\/p>\n\n\n\n
Meanwhile, Chicago Fed chief Austan Goolsbee said his main worry was inflation, while San Francisco boss Mary Daly was open to any options with regards to a cut in December.<\/p>\n\n\n\n
Governor Stephen Miran, a Trump nominee, wanted to see more cuts.<\/p>\n\n\n\n
\u201cThe divergence in opinions reinforces Fed Powell\u2019s assessment that another fed funds rate in December is not a foregone conclusion, with the lack of data adding to the need to wait before making a decision (when driving in a fog, best to slow down),\u201d wrote National Australia Bank\u2019s Rodrigo Catril.<\/p>\n\n\n\n
Data on Monday indicated some further weakness in the US economy, with a key gauge of activity in the manufacturing sector contracting more than expected and for an eighth straight month in October as demand and output weakened.<\/p>\n","protected":false},"excerpt":{"rendered":"
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